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TĘÄ ’’:QuoteSingle1QuoteSingle1Ó  ÓÓ5+° °` ø hĄpČ xŠ (#5ÓŌ€ōōōŌŌW€ō\  `*Times New RomanTTWŌŌ  ŌŌ  ŌŌ  ŌŌ  ŌŌ€XXXŌŌW€ō\  `*Times New RomanTTWŌÓ>4°X°` ø hĄpČ xŠ (#>ÓÓ  ÓLĮÄ ’’6Block TextBlock TextÓ  ÓÓ8.°°` ø hĄpČ xŠ (#8ÓŌ€XXXŌŌO€<ž6X9`("Courier NewTTOŌŌ  ŌŌ  ŌŌ  ŌŌ  ŌŌ€XXXŌŌW€ō\  `*Times New RomanTTWŌÓ>4°X°` ø hĄpČ xŠ (#>ÓÓ  Ó<ž6X9`("Courier NewTTP’’8page numberpage numberŌ  ŌŌ  ŌŌ  ŌŌ  Ō<;T ’’.footerfooterÓ  ÓÓ°°ĄŠ (#ÓŌ  ŌŌ  ŌŌ  ŌŌ  ŌÓ>4°X°` ø hĄpČ xŠ (#>ÓÓ  Óh’’:Default ParaDefault Paragraph FontŌ  ŌŌ  ŌŌ  ŌŌ  Ō ƒŻ ƒ E)ŻŌ€X°ÄXņōŌŌ€X°ÄXXX°ÄŌŻ  Żß‡€QA=x h x p€ €@XE»°dČdČ»°dȇßā °»°»°(#°(#āÓ$°°ĄŠ (#°œX$ÓĢā °(#°(#°»°»āÓH.°°` ø hĄpČ xŠ (#°°ĄŠ (#HÓ(Y2E$©©Ż ƒM!ŻŌ€X°ÄXņōŌŌ€X°ÄXXX°ÄŌŻ  ݃ Level 1 Level 2 Level 3 Level 4 Level 5(Y2E$¢¢Ż ƒM!ŻŌ€X°ÄXņōŌŌ€X°ÄXXX°ÄŌŻ  Ż(Y2E$££Ż ƒM!ŻŌ€X°ÄXņōŌŌ€X°ÄXXX°ÄŌŻ  Ż(’’$””Ś  ŚŚ  Ś'dxd Cž’<< c’’ VŻ ƒE"ŻŌ€X°ÄXņōŌŌ€X°ÄXXX°ÄŌŻ  ŻŻ‚ ’’’ŻÓ  ÓÓ$°°ĄŠ (#°œX$ÓŌ  ŌŌ  ŌŻ  ŻŻ‚’’’ŻŌ  ŌŌ  ŌŻ  ŻŌ@  ŌŚ  Ś1Ś  ŚŌA  ŌŻ‚’’’¼ƒŻŌ  ŌŌ  ŌŻ  Ż(’’$ņņŚ  ŚŚ  Śóó CŻ ƒM!ŻŌ€X°ÄXņōŌŌ€X°ÄXXX°ÄŌŻ  ŻŌ€XŁFXXX°ÄŌÓB.°°` ø hĄpČ xŠ (#°œXBÓŌ€X°ÄXXXŁFŌņņŚ  Ś1Ś  Śóóņņ1óó€Ō€XŁFXXX°ÄŌDefendants€have€also€moved€to€dismiss€the€Amended€Complaint.€Š ° ŠThe€Court€reserves€ruling€on€that.€€This€memorandum€is€limited€toŠ ‚Ņ Ša€ruling€on€an€expedited€basis€on€the€motion€for€a€preliminaryŠ Jš Šinjunction.€€Ō€X°ÄXXXŁFŌ QŻ ƒM!ŻŌ€X°ÄXņōŌŌ€X°ÄXXX°ÄŌŻ  ŻŌ€XŁFXXX°ÄŌÓB.°°` ø hĄpČ xŠ (#°œXBÓŌ€X°ÄXXXŁFŌņņŚ  Ś2Ś  Śóóņņ2óóŌ€XŁFXXX°ÄŌ€Potential€bidders€are€referred€to€in€the€Proxy€Statement€byŠ ° Šalphabet€letters€and€their€actual€identities€are€not€publiclyŠ xČ Šdisclosed.€€The€parties€have€not€objected€to€continuing€thisŠ @ Šdevice€in€the€current€litigation.€€Ō€X°ÄXXXŁFŌ Ż ƒM!ŻŌ€X°ÄXņōŌŌ€X°ÄXXX°ÄŌŻ  ŻŌ€XŁFXXX°ÄŌÓB.°°` ø hĄpČ xŠ (#°œXBÓŌ€X°ÄXXXŁFŌņņŚ  Ś3Ś  Śóóņņ3óóŌ€XŁFXXX°ÄŌ€There€can€be€many€compelling€reasons€why€a€company€would€chooseŠ ° Šnot€to€pursue€a€public€auction€or€active€solicitation€process.€Š xČ ŠņņIn€re€MONY€Group,€Inc.€Shareholder€Litigationóó,€852€A.2d€9,€19Š @ Š(De.€Ch.€2004)€presents€a€cautionary€tale€about€the€failed€publicŠ X Šauction€of€Allmerica€Financial€that€would€give€pause€to€any€boardŠ Š  Šconsidering€such€a€process.Ō€X°ÄXXXŁFŌ(Š2Żķ$¤¤Ż ƒM!ŻŌ€X°ÄXņōŌŌ€X°ÄXXX°ÄŌŻ  ŻÓÓŌ€°ÄXXX°ÄŌŚ  Ś0Ś  Ś3|x (>M$””Ō€X°ÄXņōŌŌ€X°ÄXXX°ÄԘHP LaserJet 5MČ,,,,Č0!®‚:2ā ¤n‘1imes0"’U‹’ĄĄĄ dŻ ƒM!ŻŌ€X°ÄXņōŌŌ€X°ÄXXX°ÄŌŻ  ŻŌ_ŌÖ€ ’’ÖŃ  ŃŌ  ŌŌ_ŌŌ€XŁFXXX°ÄŌDAVID€JASINOVER€€€€€€€€€€€€€€€€€*ą  ąą p ąIN€THEŠ ° Š€€€€€€€€€€€€€€€€€€€€€€€Š xČ Šą0  ąą ` ąPlaintiffą  ąą h ąą Ą ą€€*ą  ąą p ąCIRCUIT€COURTŠ@(#(# ŠĢvs.€€€€€€€€€ą ø ą€€ą  ąą h ąą Ą ą€€*ą  ąą p ąFORŠ Š  Š€€€€€€€€€Š ˜č ŠTHE€ROUSE€COMPANY,€ET€AL.ą Ą ą€€*ą  ąą p ąHOWARD€COUNTYŠ ` ° ŠĢÓ?+° °` ø hĄpČ xŠ (#°œX?Óą0 ` ąDefendantsą h ąą Ą ą€€*ą  ąą p ąCase€No.€13„C„04„59594Šš @` (#` (# ŠÓE.°°` ø hĄpČ xŠ (#°°` ‹XEÓĢ*€€€€€€€*€€€€€€€*€€€€€€€*€€€€€€€*€€€€€€€*€€€€€€€*€€€€€€€*€€€€€€*Š € Š  ŠĢÓÓÓ0°°pČ xŠ (#°°X0Óą@<< ģąņņMEMORANDUM€AND€ORDERóóˆŠ `  ŠÓE.°°` ø hĄpČ xŠ (#°°†XEÓņ ņI.ą  ąIntroductionó óŠ  š  Šą  ąBefore€the€Court€is€the€Motion€of€Plaintiff€David€JasinoverŠ 0€  Š(š šPlaintiffšš)€seeking€a€preliminary€injunction€enjoining€theŠ Ą ŠDefendants€from€holding€a€special€stockholder€meeting€on€NovemberŠ P  Š9,€2004,€where€the€common€stockholders€of€The€Rouse€CompanyŠ ą0 Š(š šRousešš)€are€to€vote€on€a€merger€agreed€to€between€Rouse€andŠ pĄ ŠGeneral€Growth€Properties,€Inc.€(š šGGPšš).€€The€parties€have€fullyŠ P Šbriefed€the€issues€on€an€expedited€basis,€and€a€hearing€was€held.€Š ą ŠThis€constitutes€the€Courtššs€ruling.Š  p Šņ ņII.ą  ąStatement€of€the€Caseó óŠ °  Šą  ąOn€August€25,€2004,€Plaintiff€David€Jasinover€filed€hisŠ @" Šcomplaint€against€Rouse,€ten€members€of€its€Board€of€Directors,Š Š $ Šand€GGP.€€On€October€18,€2004,€Plaintiff€filed€what€he€styled€asŠ `"°& Ša€First€Amended€Class€Complaint€(š šAmended€Complaintšš).€€In€theŠ š#@( ŠAmended€Complaint,€Plaintiff€accused€the€individual€Defendants€ofŠ €%Š * Šbreaching€their€fiduciary€duties€in€approving€and€recommendingŠ '`", Šthe€merger€of€Rouse€with€GGP.€€Rouse€and€GGP€are€cited€in€theŠ  (š#. Šcomplaint€as€being€either€co„conspirators€in€the€breaches€orŠ 0*€%0 Šaiding€and€abetting€the€breaches.€€On€that€same€date,€PlaintiffŠ Ą+'2 Šalso€filed€a€Motion€for€Temporary€Restraining€Order€orŠ P- (4/ ŠPreliminary€Injunction€and€a€Motion€for€Expedited€Discovery.€€Š ° Šą  ąAt€a€hearing€on€October€22,€2004,€Plaintiff€withdrew€hisŠ @ Šrequest€for€a€temporary€restraining€order,€and€the€CourtŠ Š  Šsubsequently€denied€the€request€for€expedited€discovery.€AŠ ` ° Šbriefing€schedule€was€established€for€the€preliminary€injunctionŠ š @ Šhearing,€and€the€hearing€was€held€on€November€3,€2004.ŃČŃŁ1ƒM!Ł×ƒׯ ƒ’’ŻņņŚ  Ś1Ś  ŚóóŻ  Ż×  ×ŲŲŁ1M!ŁŠ € Š  Šņ ņIII.ą  ąStatement€of€the€Factsó óŠ `  Š€€€€€A.ą ` ąBackground€of€the€MergerŠ  š  Šą  ąIn€early€June€2004,€Defendant€Anthony€W.€DeeringŠ 0€  Š(š šDeeringšš)„š!šRouseššs€chairman,€president€and€CEOš!š„was€approachedŠ Ą Šby€the€CEO€of€a€company€referred€to€in€the€Proxy€as€š šCompany€AššŁ2ƒM!Ł×ƒŗׯ ƒ’’ŻņņŚ  Ś2Ś  ŚóóŻ  Ż×  ×ŲŲŁ2M!Ł,Š P  Šwho€proposed€to€Deering€that€Rouse€should€consider€being€acquiredŠ ą0 Šby€Company€A.€€The€CEO€of€Company€A€indicated€a€price€range€forŠ pĄ Šan€acquisition€of€Rouse.€Deering€determined€that€Company€AššsŠ P Šoffer€was€š šunacceptable,šš€and€decided€to€not€pursue€furtherŠ ą Šdiscussions€with€Company€A.€€€Š  p Šą  ąLater€that€month,€Company€Aššs€CEO€again€approached€DefendantŠ °  ŠDeering,€on€two€separate€occasions,€and€brought€up€theŠ @" Špossibility€of€a€sale€transaction€between€Company€A€and€Rouse.€Š Š $ ŠHowever,€in€light€of€the€fact€that€Company€A€would€not€increaseŠ `"°& Šits€price€range€for€the€purchase€of€Rouse,€Deering€turned€downŠ ° ŠCompany€A.Š @ Šą  ąFollowing€these€discussions€with€Company€A,€Rouse€engagedŠ Š  Štwo€financial€advisors,€Deutsche€Bank€and€Goldman€Sachs,€and€aŠ ` ° Šlegal€advisor€to€assist€and€advise€the€Board€on€š špotentialŠ š @ Šstrategies€for€approaching€the€market€and€pricing€and€valuationŠ € Š  Šissues.šš€€After€these€advisors€were€retained,€Defendant€Deering,Š `  Šalong€with€other€members€of€Rouseššs€senior€management,€instructedŠ  š  Šthe€Boardššs€financial€advisors€to€contact€two€possible€biddersŠ 0€  Šfor€the€Company„„GGP€and€a€company€referred€to€in€the€Proxy€asŠ Ą Šš šCompany€Bšš.€These€companies€are€described€as€leading€publiclyŠ P  Štraded€companies€in€the€retail€shopping€mall€industry.€Company€AŠ ą0 Šwas€not€contacted€to€participate€in€the€bidding€process.€€TheŠ pĄ ŠProxy€statement€states€that€the€Board€believed€that€š šGGP€andŠ P ŠCompany€B€were€the€companies€most€likely€to€consummate€aŠ ą Štransaction€within€a€price€range€acceptable€to€Rouse.šš€Rouse€alsoŠ  p Šcites€the€familiarity€that€these€companies€had€with€Rouse€whichŠ °  Šallowed€the€discussions€to€proceed€quickly€and€confidentially.Š @" Šą  ąBetween€July€and€August€2004,€both€GGP€and€Company€BŠ Š $ Šconducted€limited€due€diligence€and€had€multiple€conversationsŠ `"°& Šwith€Rouseššs€management€team€about€the€possible€price€range€forŠ š#@( Šthe€Company.€€During€these€conversations,€Deering€indicated€thatŠ €%Š * Šhe€believed€a€fair€price€for€Rouse€was€in€the€range€of€$70„$75Š '`", Šper€share.€€Meanwhile,€Company€Bššs€CEO€informed€Deering€thatŠ  (š#. ŠCompany€B€may€be€interested€in€paying€as€much€as€$70€per€shareŠ 0*€%0 Šfor€Rouse.€€GGP,€on€the€other€hand,€informed€Deering€that€GGPššsŠ Ą+'2 Šprice€range€for€Rouse€was€$65„$70€per€share.Š ° Šą  ąIn€late€July€2004,€the€Rouse€Board€resolved€to€continueŠ @ Šexclusive€negotiations€with€GGP€and€Company€B.€€Company€A€was€notŠ Š  Šadded€to€the€process.€€In€addition,€Deering€and€other€members€ofŠ ` ° ŠRouseššs€management€team€determined€that€August€16,€2004€should€beŠ š @ Ša€target€date€for€the€completion€of€the€sale€process.Š € Š  Šą  ąIn€early€August€2004,€confidentiality€agreements€wereŠ `  Šnegotiated€between€Rouse€and€both€GGP€and€Company€B.€€During€theŠ  š  Šnegotiation€process,€Defendant€Deering€not€only€reiterated€thatŠ 0€  Š$70„$75€per€share€was€indicative€of€the€range€of€values€RouseŠ Ą Šmight€find€acceptable,€but€also€informed€the€bidders€that€anŠ P  Šoffer€of€$75€per€share€would€be€considered€š špreemptive.šš€ą Š ąŠ ą0 Šą  ąOn€August€12,€2004,€Company€Bššs€CEO€met€with€DefendantŠ pĄ ŠDeering€about€his€concerns€over€managementššs€August€16,€2004Š P Šdeadline€for€the€completion€of€the€sale€process.€€Specifically,Š ą ŠCompany€Bššs€CEO€advised€Deering€that,€given€the€size€of€theŠ  p Štransaction€and€the€requirement€that€the€bidder€have€fullyŠ °  Šcommitted€financing€in€place€at€the€time€of€executing€theŠ @" Šacquisition€agreement,€Company€B€would€not€be€in€a€position€toŠ Š $ Šenter€into€a€definitive€agreement€until€August€23€or€August€24.€€Š `"°& Šą  ąAlso€on€August€12,€2004,€Deering€spoke€with€GGPššs€CFO,€whoŠ š#@( Šadvised€that€GGP€could€be€ready€to€submit€a€definitiveŠ €%Š * Šacquisition€proposal€as€early€as€August€16,€but€would€not€do€soŠ '`", Šwithout€a€commitment€that€Rouseššs€board€would€be€in€a€position€toŠ  (š#. Šrespond€to€its€proposal€within€12€hours.€€In€addition,€GGPššs€CFOŠ 0*€%0 Šstated€that€GGP€would€not€submit€a€mark„up€of€the€draft€mergerŠ Ą+'2 Šagreement€until€GGP€was€informed€of€the€deadline€for€theŠ ° Šsubmission€of€bids.€Š @ Šą  ąThat€same€evening,€counsel€for€Rouse€spoke€with€Company€BššsŠ Š  Šoutside€counsel€to€clarify€Company€Bššs€position€concerningŠ ` ° Štiming.€Counsel€to€Company€B€confirmed€that€Company€B€would€be€inŠ š @ Ša€better€position€to€make€an€unconditional€bid€if€the€bid€processŠ € Š  Šwere€extended€for€an€additional€week.€Š `  Šą  ąOn€August€13,€2004,€Deering€received€a€telephone€call€fromŠ  š  Šthe€CEO€of€Company€A,€who€evidently€had€learned€that€Rouse€wasŠ 0€  Šconsidering€bids€for€the€purchase€of€the€Company.€€In€the€courseŠ Ą Šof€that€call,€Company€Aššs€CEO€reiterated€that€Company€A€remainedŠ P  Šinterested€in€a€possible€sale€transaction€but€did€not€make€anyŠ ą0 Šproposal€with€respect€to€a€price€range.€€Š pĄ Šą  ąThat€day,€counsel€to€Company€B€again€indicated€that€CompanyŠ P ŠB€would€need€additional€time€to€be€in€a€position€to€meet€RouseššsŠ ą Šprice€expectations€and€to€deliver€an€all„cash€proposal€that€wasŠ  p Šfirmly€committed€with€respect€to€financing.€€In€addition,€GGPŠ °  Šagreed€to€deliver€a€mark„up€of€the€merger€agreement€to€counselŠ @" Šfor€Rouse€on€August€15,€and€further€confirmed€that€GGP€could€beŠ Š $ Šready€to€submit€a€definitive€acquisition€proposal€as€early€asŠ `"°& ŠAugust€16,€but€would€not€do€so€without€a€commitment€that€theŠ š#@( ŠBoard€would€be€in€a€position€to€respond€to€its€proposal€within€12Š €%Š * Šhours.€Š '`", Šą  ąIn€the€evening€of€August€13,€2004,€Deering€again€spoke€toŠ  (š#. Šthe€CEO€of€Company€B,€who€indicated€that€Company€B€now€believedŠ 0*€%0 Šthat€it€could€submit€a€bid€by€the€morning€of€August€18,€but€wouldŠ Ą+'2 Šnot€be€in€a€position€to€execute€a€definitive€agreement€until€itŠ ° Šhad€completed€certain€related€financing€arrangements.€Š @ Šą  ąOn€August€16,€2004,€members€of€Rouse€management€had€aŠ Š  Šteleconference€with€representatives€of€Rouseššs€legal€andŠ ` ° Šfinancial€team€to€review€the€status€of€discussions€with€GGP€andŠ š @ ŠCompany€B.€Following€this€discussion,€Rouse€scheduled€a€boardŠ € Š  Šmeeting€for€August€19,€2004€to€discuss€proposals€from€Company€BŠ `  Šand€GGP.€€In€addition,€Deering€also€had€a€teleconference€with€theŠ  š  ŠCEO€of€Company€B€who€informed€him€that€Company€B€now€believed€itŠ 0€  Šcould€be€in€a€position€to€sign€a€binding€agreement€with€noŠ Ą Šfinancing€contingency€on€August€20.€Š P  Šą  ąOn€August€17,€2004,€Deering€and€other€members€of€his€teamŠ ą0 Šset€a€final€bid€deadline€of€August€19,€and€had€Rouseššs€counselŠ pĄ Šdistribute€a€bid€procedures€letter€to€Company€B€and€GGP,€whichŠ P Šstated€that€final€drafts€of€their€respective€merger€agreementsŠ ą Šwould€be€due€no€later€than€4:30€p.m.€on€August€18€and€that€bidŠ  p Šproposals€would€be€due€by€4:30€p.m.€on€August€19.€€€Š °  Šą  ąOn€August€18,€the€chairman€of€Company€B€informed€DefendantŠ @" ŠDeering€that€Company€B€intended€to€withdraw€from€the€saleŠ Š $ Šprocess.€Š `"°& Šą  ąIn€the€afternoon€of€August€18,€the€CEO€of€Company€A€calledŠ š#@( ŠDeering,€informed€him€that€he€was€aware€that€Rouse€was€inŠ €%Š * Šdiscussions€concerning€a€possible€sale€of€the€Company,€and€againŠ '`", Šreiterated€Company€Aššs€interest€in€acquiring€Rouse.€€DeeringŠ  (š#. Šoffered€to€provide€Company€A€with€drafts€of€a€proposed€mergerŠ 0*€%0 Šagreement€and€offered€to€make€management€of€Rouse€available€for€aŠ Ą+'2 Šmeeting€with€Company€A€on€August€19„„the€deadline€for€submissionŠ ° Šof€final€bids€pursuant€to€Rouseššs€bid€procedures€letter.€€CompanyŠ @ ŠAššs€CEO€also€informed€one€of€Rouseššs€financial€advisors€that€itŠ Š  Šdesired€to€participate€in€any€process€for€the€sale€of€Rouse,€andŠ ` ° Šindicated€that,€if€Company€A€were€given€the€same€access€toŠ š @ Šinformation€and€time€for€evaluation€as€other€bidders,€he€believedŠ € Š  Šthat€Company€A€might€be€able€to€offer€a€price€within€the€range€ofŠ `  Šapproximately€$65€to€$70€per€share.€Š  š  Šą  ąAlso€in€the€afternoon€of€August€18,€counsel€to€Company€BŠ 0€  Šcalled€Rouseššs€counsel€and€advised€that,€although€Company€B€didŠ Ą Šnot€intend€to€submit€a€bid€on€August€19,€Company€B€intended€toŠ P  Šsubmit€a€revised€draft€merger€agreement,€and€further€stated€thatŠ ą0 ŠCompany€B€remained€firmly€committed€to€a€transaction€with€Rouse.Š pĄ Šą  ąOn€August€19,€the€deadline€for€submission€of€final€bids,Š P ŠRouseššs€counsel€distributed€forms€of€draft€merger€agreements€toŠ ą ŠCompany€A.€€In€addition,€Company€Bššs€chairman€sent€a€letter€toŠ  p ŠDeering€explaining€that€Company€B€would€not€be€submitting€aŠ °  Šproposal€on€August€19.€€The€letter€read,€in€part,€as€follows:€Š @" ŠÓÓą8  ąą8` Š Š ąI€wanted€to€call€you€today€to€tell€you€whereŠ Š $ Šwe€are€in€the€offer€process€but€I€understandŠ ˜!č% Šthat€given€the€formalities€of€the€process€IŠ `"°& Šam€required€to€submit€this€letter€to€you.Š (#x' Š...Rouse€has€developed€an€impressiveŠ š#@( Športfolio€of€premier€shopping€centers€and€ourŠ ø$ ) Šreview€over€the€past€weeks€has€reconfirmedŠ €%Š * Šour€view€that€an€acquisition€of€your€shoppingŠ H&˜!+ Šcenter€business€would€be€an€excellentŠ '`", Šaddition€to€our€business...€However,€in€theŠ Ų'(#- Šshort€time€avail„able€to€us,€we€have€not€beenŠ  (š#. Šable€to€get€completely€comfortable€with€theŠ h)ø$/ Šland€business€or€how€to€appropriately€valueŠ 0*€%0 Šit€for€purposes€of€making€our€offer.€€It€isŠ ų*H&1 Šsimply€not€a€business€with€which€we€areŠ Ą+'2 Šfamiliar€or€which€we€can€properly€evaluate€onŠ ° Šan€accelerated€time€frame.€€ŠxČ` x` x ŠĢÓ  Ó*€€*€€*Š X ŠÓ  ÓĢŻ‚’’’ŻÓ  ÓÓB.°°` ø hĄpČ xŠ (#°°XBÓŌ€XŁFXXXŁFŌŌ€XŁFXXXŁFŌŌ  ŌŌ  ŌŻ  Żą8  ąą8` Š Š ąWe€have€worked€day€and€night€over€the€pastŠ ˜č Šseveral€weeks€to€try€to€meet€your€schedule.€Š ` ° ŠWe€told€you€at€the€beginning€of€the€processŠ ( x Šthat€we€were€concerned€about€how€short€theŠ š @ Ševaluation€period€was.€€Despite€our€bestŠ ø   Šefforts,€the€compressed€time€period€for€theŠ € Š  Šprocess€and€the€restriction€on€talking€toŠ H ˜  Šinvestors€did€not€give€us€the€opportunity€toŠ `  Šget€comfortable€enough€to€make€an€uncon„Š Ų(  Šditional€all€cash€offer€for€Rouse€today.€Š š ` x` x ŠŻ‚’’’>procŻŌ  ŌŌ  ŌŌ€XŁFXXXŁFŌŌ€XŁFXXXŁFŌÓ °°X°°XÓÓ  ÓŻ  ŻĢŻ‚’’’ŻÓ  ÓÓB.°°` ø hĄpČ xŠ (#°°XBÓŌ€XŁFXXXŁFŌŌ€XŁFXXXŁFŌŌ  ŌŌ  ŌŻ  Żą8  ąą8` Š Š ąI€want€you€and€your€Board€to€know€that€we€areŠ 0€  Šstill€prepared€to€move€forward€with€anŠ ųH  Šunconditional€all€cash€offer€for€Rouse€afterŠ Ą Šfurther€discussions€and,€with€your€approval,Š ˆŲ Šthe€ability€to€talk€to€potential€investors.€Š P  ŠWe€are€working€with€prominent€financialŠ h Šinstitutions€and€are€confident€that€if€we€areŠ ą0 Šprovided€another€week,€we€would€be€able€toŠ Øų Šmake€an€all€cash€offer€that€would€deliver€aŠ pĄ Šsubstantial€premium€to€your€shareholders.€Š8ˆ` x` x ŠŻ‚’’’„BprocŻŌ  ŌŌ  ŌŌ€XŁFXXXŁFŌŌ€XŁFXXXŁFŌÓ °°X°°XÓÓ  ÓŻ  ŻĢÓ  Ó*€€*€€*Š Č ŠÓ  ÓĢŻ‚’’’ŻÓ  ÓÓB.°°` ø hĄpČ xŠ (#°°XBÓŌ€XŁFXXXŁFŌŌ€XŁFXXXŁFŌŌ  ŌŌ  ŌŻ  Żą8  ąą8` Š Š ąTony,€you€know€that€our€interest€is€sincereŠ XØ Šand€that€we€are€very€serious.€€You€know€thatŠ  p Šwhile€I€have€important€obligations...I€amŠ č8 Šprepared€to€come€to€New€York€to€meet€with€you.€Š °  ŠI€hope€you€and€your€Board€will€give€us€theŠ xČ! Šopportunity€we€are€requesting.€Š@"` x` x ŠŻ‚’’’ĀFprocŻŌ  ŌŌ  ŌŌ€XŁFXXXŁFŌŌ€XŁFXXXŁFŌÓ °°X°°XÓÓ  ÓŻ  ŻĢÓÓą  ąAlso€on€August€19,€the€CEO€of€Company€A€informed€Deering€andŠ Š $ ŠRouseššs€counsel€that€Company€A€was€interested€in€making€a€proposalŠ `"°& Šbut€could€not€submit€a€bid€on€that€day,€and€needed€a€range€of€time,Š š#@( Šfrom€a€few€days€to€a€few€weeks,€to€be€in€a€position€to€submit€aŠ €%Š * Šbid.€€Company€A€requested€that€Rouse€delay€the€sale€process€or,€atŠ '`", Ša€minimum,€limit€any€termination€fee€payable€under€a€mergerŠ  (š#. Šagreement€so€that€Company€A€would€have€an€opportunity€to€make€anŠ 0*€%0 Šintervening€bid.€Š Ą+'2 Šą  ąAt€approximately€5:00€p.m.€on€August€19,€Defendant€DeeringŠ ° Šinformed€GGP€that,€š šif€GGP€had€an€aggressive€and€attractive€price,Š @ ŠRouseššs€board€would€be€prepared€to€act€quickly.ššŠ Š  Šą  ąFifteen€minutes€later,€at€approximately€5:15€p.m.,€Company€AššsŠ ` ° ŠCEO€sent€a€letter€to€Deering€indicating€that€Company€A€would€beŠ š @ Šwilling€to€work€toward€a€firm€proposal€to€acquire€Rouse.€€TheŠ € Š  Šletter€read,€in€part,€as€follows:€Š `  ŠŻ‚’’’ŻÓ  ÓÓB.°°` ø hĄpČ xŠ (#°°XBÓŌ€XŁFXXXŁFŌŌ€XŁFXXXŁFŌŌ  ŌŌ  ŌŻ  ŻÓÓą8  ąą8` Š Š ąI€enjoyed€our€dinner€in€June€where€weŠ  š  Šdiscussed€our€interest€in€a€possibleŠ hø  Šacquisition€of€The€Rouse€Company€by€[CompanyŠ 0€  ŠA].€€Unfortunately,€as€we€discussed€thatŠ ųH  Ševening,€your€expectations€then€were,Š Ą Šcandidly,€too€high.€€I€now€understand€that€youŠ ˆŲ Šare€conducting€an€auction€for€the€possibleŠ P  Šsale€of€the€company.€€I€am€sure€you€agree€thatŠ h Šit€is€in€your€interests€and€those€of€yourŠ ą0 Šshareholders€to€obtain€the€best€possible€priceŠ Øų Šfor€the€company.€€To€that€end,€[Company€A]Š pĄ Šshould€be€given€a€full€and€fair€opportunity€toŠ 8ˆ Šparticipate.€€I€believe€that€it€would€beŠ P Šinappropriate€for€this€auction€to€not€includeŠ Č Š[Company€A]š8š.€€During€our€conversation€lastŠ ą Ševening,€you€mentioned€that€[Company€A]€wasŠ XØ Šfree€to€enter€a€bid€for€Rouse€but€that€finalŠ  p Šbids€were€due€this€Friday€and€that€anyŠ č8 Š[Company€A]€bid€was€required€to€be€fullyŠ °  Šfinanced€and€all€cash.€€ŠxČ!` x` x ŠŻ‚’’’›NprocŻŌ  ŌŌ  ŌŌ€XŁFXXXŁFŌŌ€XŁFXXXŁFŌÓ °°X°°XÓÓ  ÓŻ  ŻĢŻ‚’’’ŻÓ  ÓÓB.°°` ø hĄpČ xŠ (#°°XBÓŌ€XŁFXXXŁFŌŌ€XŁFXXXŁFŌŌ  ŌŌ  ŌŻ  Żą8  ąą8` Š Š ąWe€will€not€be€able€to,€nor€do€we€believe€itŠ  X# Šis€reasonable€to€expect€us€to€be€able€to,€makeŠ Š $ Ša€bid€for€Rouse€in€less€than€48€hours,Š ˜!č% Šespecially€when€we€have€not€had€theŠ `"°& Šopportunity€to€conduct€any€financial€or€legalŠ (#x' Šdue€diligence,€and€be€on€a€level€playing€fieldŠ š#@( Šwith€the€other€participants.€€However,€we€areŠ ø$ ) Šwilling€to€commit€immediately€to€commence€dueŠ €%Š * Šdiligence€and€would€expect€to€be€in€a€positionŠ H&˜!+ Što€submit€a€bid€promptly€after€completion€ofŠ '`", Šour€work.€ŠŲ'(#-` x` x ŠŻ‚’’’UprocŻŌ  ŌŌ  ŌŌ€XŁFXXXŁFŌŌ€XŁFXXXŁFŌÓ °°X°°XÓÓ  ÓŻ  ŻĢÓ ČÓŻ‚’’’ŻÓ  ÓÓ?+° °` ø hĄpČ xŠ (#°°X?ÓŌ€ōo ņXXŁFŌŌ€ōRgņņōo ŌŌ  ŌŌ  ŌŻ  ŻÓB+° °` ø hĄpČ xŠ (#°°` ‹XBÓą8 ` ąŌ€X°ÄXņōRgŌŌ€XŁFXXX°ÄŌWe€urge€that€you€do€not€enter€into€a€saleŠ h)ø$/ Šagreement€with€a€third€party€prior€to€[CompanyŠ 0*€%0 ŠA]€being€provided€a€reasonable€opportunity€toŠ ų*H&1 Šsubmit€a€bid,€particularly€if,€prior€toŠ Ą+'2 Šcompletion€of€a€full€auction€process,€thisŠ ° Šsale€agreement€were€to€provide€for€aŠ xČ Štermination€or€a€break„up€fee.€€We€anticipateŠ @ Šthat€any€offer€made€by€[Company€A]€would€beŠ X Šall€cash,€and€we€are€prepared€to€promptlyŠ Š  Šnegotiate€a€definitive€agreement€without€aŠ ˜č Šfinancial€contingency.€Š` °` x` x ŠÓ ČÓŻ‚’’’[YprocŻŌ  ŌŌ  ŌŌ€XŁFXXXŁFŌŌ€XŁFXXXŁFŌÓ* °°X°°` ˆXxŠ X*ÓÓ  ÓŻ  ŻÓ  ÓÓB.°°` ø hĄpČ xŠ (#°°XBÓ*€€*€€*Š š @ ŠŻ‚’’’ŻÓ  ÓÓB.°°` ø hĄpČ xŠ (#°°XBÓŌ€XŁFXXXŁFŌŌ€XŁFXXXŁFŌŌ  ŌŌ  ŌŻ  Żą8  ąą8` Š Š ąŠ ` x` x Šą8  ąą8` Š Š ąWe€believe€that€a€transaction€between€[CompanyŠ € Š  ŠA]€and€Rouse€is€compelling,€and€mostŠ H ˜  Šimportantly,€should€produce€substantial€andŠ `  Šimmediate€value€for€your€shareholders....WeŠ Ų(  Šhave€a€team€in€place€that€is€preparedŠ  š  Šimmediately€to€begin€due€diligence.€I€lookŠ hø  Šforward€to€hearing€from€you.€Š0€ ` x` x ŠŻ‚’’’~^H ˜ŻŌ  ŌŌ  ŌŌ€XŁFXXXŁFŌŌ€XŁFXXXŁFŌÓ °°X°°XÓÓ  ÓŻ  ŻĢÓÓą@..ąAt€approximately€11:00€p.m.€on€August€19,€GGP€delivered€a€formalŠ Ą Šbid€for€Rouse,€offering€to€purchase€each€outstanding€share€ofŠ P  ŠRouse€common€stock€for€$67.50€in€cash.€After€being€advised€byŠ ą0 Štheir€financial€advisors€that€GGPššs€offer€was€fair,€from€aŠ pĄ Šfinancial€point€of€view,€to€the€Rouse€shareholders,€Rouse€and€GGPŠ P Šexecuted€the€merger€agreement.€Š  ą ŠB.€The€Merger€Is€AnnouncedŠ ° Šą@..ąThe€Rouse/GGP€merger€was€announced€on€August€20,€2004,€when€itŠ @ Šwas€reported€that€Rouse€had€agreed€to€merge€with€GGP€in€aŠ Š  Štransaction€then€valued€at€$7.22€billion.€€Pursuant€to€theŠ ` ° Šmerger,€Rouse€common€stockholders€will€receive€$67.50€for€eachŠ š @ Šshare€of€Rouse€common€stock€they€own.Š € Š  Šą@..ąSubsequent€to€the€announcement€of€the€merger,€three€lawsuits€wereŠ `  Šfiled€challenging€the€fairness€of€the€merger„„two€in€IllinoisŠ  š  ŠChancery€Court,€where€GGP€is€headquartered,€and€the€presentŠ 0€  Šaction.€€All€of€these€actions€sought,€ņņinter€aliaóó,€to€enjoin€theŠ Ą Šmerger€and€require€the€Rouse€Board€to€uphold€their€fiduciaryŠ P  Šduties€under€Maryland€law€to€the€Companyššs€shareholders.Š ą0 Šą@..ąOn€September€7,€2004,€Rouse€filed€a€preliminary€proxy€statementŠ pĄ Šwith€the€SEC€(the€š šPreliminary€Proxyšš),€where€the€Company€and€itsŠ P ŠBoard€first€disclosed€to€the€public€the€background€of€the€merger,Š ą Šincluding€the€process€employed€by€the€Rouse€Board€that€culminatedŠ  p Šin€the€execution€of€the€Agreement€and€Plan€of€Merger€between€andŠ °  Šamong€Rouse€and€GGP€dated€August€19,€2004€(the€š šMergerŠ @" ŠAgreementšš).€€Š Š $ Šą@..ąC.€ą@..ąProposed€Vote€on€the€MergerŠ `"°& Šą@..ąAs€required€by€Maryland€Law,€the€merger€is€being€put€to€aŠ š#@( Šstockholder€vote.€€Approval€of€the€merger€requires€theŠ €%Š * Šaffirmative€vote€of€the€holders€of€at€least€two„thirds€of€theŠ '`", Šoutstanding€shares€of€Rouse€common€stock€entitled€to€vote€on€theŠ  (š#. Šmerger.€€A€failure€to€vote€has€the€same€effect€as€a€vote€againstŠ 0*€%0 Šthe€merger.€€The€vote€is€set€for€the€morning€of€November€9,€2004,Š Ą+'2 Šin€New€York.€€As€required€by€federal€law,€a€Proxy€StatementŠ ° ŠPursuant€to€Section€14(a)€of€the€Securities€Exchange€Act€of€1934Š @ Š(š šProxyšš€or€š šProxy€Statementšš)€has€been€prepared€and€submitted€toŠ Š  Šthe€stockholders.€€It€was€dated€October€8€and€mailed€to€theŠ ` ° Šstockholders€on€or€about€October€9,2004.€The€Rouse€Board€informedŠ š @ Šthe€stockholders€that,€in€the€Boardššs€view,€the€merger€isŠ € Š  Šadvisable€and€fair€to,€and€in€the€best€interests€of,€Rouse€andŠ `  Šits€stockholders,€and€recommended€that€stockholders€vote€forŠ  š  Šapproval€of€the€merger.Š 0€  Š€€€€ą@..ąIn€the€Proxy€Statement,€the€Board€summarized€its€reasons€forŠ Ą Šaccepting€the€GGP€proposals€as€follows:Š P  ŠÓÓą8@..ąą8@..ąOur€board€considered€the€fact€that,€of€the€three€companies€deemedŠ ą0 Šmost€likely€to€be€capable€of€consummating€a€transaction€on€termsŠ Øų Šacceptable€to€Rouse,€only€GGP€had€submitted€a€firm€proposal,Š pĄ Šwhile€Company€A€had€previously€provided€price€indications€belowŠ 8ˆ Šthe€price€proposed€by€GGP,€and€Company€B€had€declined€to€submit€aŠ P Šproposal€despite€having€had€access€to€all€information€furnishedŠ Č Što€GGP€and€€despite€having€substantial€familiarity€with€RouseššsŠ ą Šretail€mall€portfolio.€Although€each€of€Company€A€and€Company€BŠ XØ Šhad€requested€€additional€time€to€evaluate€Rouse€and€to€presentŠ  p Šits€best€proposal,€our€board€considered€that€there€wereŠ č8 Šsignificant€risks€in€extending€the€sale€process,€including€thatŠ °  Šthere€was€no€assurance€that€Company€A€or€Company€B€wouldŠ xČ! Šultimately€present€a€proposal€that€was€more€favorable€than€GGPššsŠ @" Šproposal,€that€GGP€could€withdraw€or€reduce€its€proposal,€andŠ  X# Šthat€potential€bidders€might€seek€to€bid€jointly,€notwithstandingŠ Š $ Šthe€terms€of€the€confidentiality€agreements€executed€by€GGP€andŠ ˜!č% ŠCompany€B,€which€by€their€terms€precluded€joint€bids€withoutŠ `"°& ŠRouseššs€consent.Š (#x' ŠĢProxy€Statement,€p.29.Š ø$ ) ŠĢņ ņIV.ą@..ąStandards€for€a€Preliminary€Injunctionó óŠ H&˜!+ ŠĢÓÓą@..ąMaryland€courts€apply€the€following€four„part€test€in€determiningŠ Ų'(#- Šwhether€to€grant€a€motion€for€a€preliminary€injunction:Š h)ø$/ Šą@..ą1.ą@..ąthe€likelihood€that€plaintiff€will€succeed€on€the€merits;Š ų*H&1 Šą@..ą2.ą@..ąwhether€plaintiff€has€an€adequate€remedy€at€law€or€will€beŠ ° Širreparably€harmed€if€the€injunction€is€not€issued;Š @ Šą@..ą3.ą@..ąthe€š šbalance€of€convenience,šš€determined€by€whether€the€harm€toŠ Š  Šthe€plaintiff€if€the€injunction€is€not€granted€outweighs€the€harmŠ ` ° Što€the€defendant€if€the€injunction€is€granted;€and,Š š @ Šą@..ą4.€€the€injunction€will€not€harm€the€public€interest.€€Š € Š  ŠņņFogle€v.€H€&€G€Restaurantóó,€337€Md.€441,€455„56€(1995)€(quotingŠ `  ŠņņDOT.,€Motor€Vehicle€Admin.€v.€Armacostóó,€299€Md.€392,€404„05Š  š  Š(1984));€ņņState€Depššt€of€Health€&€Mental€Hygiene€v.€BaltimoreŠ 0€  ŠCty.óó,€281€Md.€548,€554„57€(1977).Š Ą Šą@..ąAs€the€Court€of€Appeals€made€clear€in€ņņLerner€v.€Lerneróó,€306€Md.Š P  Š771€(1986),€a€court,€when€evaluating€the€above€factors,€shouldŠ ą0 Šnot€view€each€of€them€in€isolation€and€require€a€plaintiff€toŠ pĄ Šprove€each€of€them€like€š ša€plaintiff€in€a€tort€action€[must]Š P Šprove€each€of€the€elements€of€a€tort.šš€€ņņId.óó€at€776„777.€€Rather,Š ą Šthe€court€weighs€all€factors€together€in€deciding€whether€toŠ  p Šgrant€injunctive€relief.€€Thus,€for€example,€the€š šimportance€ofŠ °  Šprobability€of€success€increases€as€the€probability€ofŠ @" Širreparable€injury€diminishes.šš€€ņņId.óó€at€784.€€The€ņņLerneróó€courtŠ Š $ Štermed€this€test€the€š šbalance€of€hardship€test,šš€stating:Š `"°& ŠÓÓą8@..ąą8@..ąWhere€the€questions€presented€by€an€application€for€anŠ š#@( Šinterlocutory€injunction€are€grave,€and€the€injury€to€the€movingŠ ø$ ) Šparty€will€be€certain€and€irreparable,€if€the€application€beŠ €%Š * Šdenied€and€the€final€decree€be€in€his€favor,€while€if€theŠ H&˜!+ Šinjunction€be€granted€the€injury€to€the€opposing€party,€even€ifŠ '`", Šthe€final€decree€be€in€his€favor,€will€be€inconsiderable,€or€mayŠ Ų'(#- Šbe€adequately€indemnified€by€a€bond,€the€injunction€usually€willŠ  (š#. Šbe€granted.€Š h)ø$/ ŠĢņņIdóó.€at€783.Š ų*H&1 ŠŠ Ą+'2 Šņ ņV.ą@..ąLikelihood€of€Success€on€the€Meritsó óŠ ° ŠĢÓÓą@..ąAn€important€factor€in€calculating€whether€a€preliminaryŠ @ Šinjunction€should€be€granted€is€whether€plaintiff€is€ultimatelyŠ Š  Šlikely€to€succeed€on€the€merits€of€the€claims€presented.€€WhileŠ ` ° Šthere€has€been€no€discovery€in€this€case€and€the€complex€issuesŠ š @ Špresented€deserve€a€full€analysis€and€consideration€on€anotherŠ € Š  Šday,€the€Court€still€must€make€an€early€prediction€as€to€theŠ `  Šlikelihood€that€Plaintiffššs€legal€claims€will€prevail€at€the€endŠ  š  Šof€the€process.Š 0€  Šą@..ąIt€is€important€to€focus€on€precisely€what€Plaintiff€hasŠ Ą Šasserted.€€Plaintiff€"has€alleged€a€breach€of€fiduciary€dutyŠ P  Šclaim€that€is€based,€first,€in€the€obligation€of€candor€and,Š ą0 Šsecond,€in€due€care,€good€faith€and€loyalty.šš€Plaintiffššs€RenewedŠ pĄ ŠMotion,€p.15.€€Plaintiff€divides€up€the€core€concerns€about€lackŠ P Šof€candor€into€three€groupings.Š ą Šą@..ąņ ņFirst.ó ó€Plaintiff€asserts€that€the€Board€"ceded€all€control€overŠ  p Šthe€bidding€process€to€Deering€and€permitted€Deering€to€ensureŠ “  Šthat€his€favored€bidder,€GGP,€won€the€bidding€war€with€CompanyŠ D”" ŠB".€Plaintiff€also€asserts€that€the€Board€does€not€explain€whyŠ Ō $$ Šthey€did€not€permit€Company€B€to€have€additional€time€to€make€aŠ d"“& Šfirm€offer€or€why€Company€A€was€not€invited€to€participate€in€theŠ ō#D( Šfinal€bidding€process.€€The€Plaintiff€believes€that€theseŠ „%Ō * Š"failures"€to€explain€violate€the€Board's€duty€of€candor.Š 'd", Šą@..ąņ ņSecondó ó.€Plaintiff€also€asserts€that€the€Defendants'€failure€toŠ ¤(ō#. Šinclude€in€the€proxy€statement€"critical€financial€informationŠ 8*ˆ%0 Šutilized€by€their€financial€advisors€in€their€valuation€analyses"Š ° Šalso€violates€the€duty€of€candor.€€The€missing€information€isŠ @ Šsaid€to€include€the€"back€up"€information€utilized€by€DeutscheŠ Š  ŠBank€and€Goldman€Sachs€in€reaching€their€conclusions€that€theŠ ` ° Šmerger€was€fair€to€the€stockholders€from€a€financial€point€ofŠ š @ Šview.€€Plaintiff€asserts€that€the€lack€of€Rouse€management'sŠ € Š  Šfinancial€projections€and€forecasts€are€of€specific€concern.Š `  Šą@..ąņ ņThird.€ó óPlaintiff€asserts€that€there€is€no€explanation€as€to€whyŠ  š  Štwo€financial€advisors€were€needed,€why€they€were€paid€whatŠ 4„  ŠPlaintiff€asserts€were€"high€sums",€and€why€the€advisor€fees€wereŠ Ä Šmade€contingent€on€the€consummation€of€the€merger.Š T¤ Šą@..ąAs€to€Plaintiff's€assertion€regarding€a€lack€of€due€care,€goodŠ ä4 Šfaith€and€loyalty,€Plaintiff€alleges€that€the€Board€cededŠ tÄ Šdecision„making€to€its€Chairman,€Deering,€that€certain€BoardŠ T Šmembers€had€"conflicting€loyalties",€and€that€six€out€of€tenŠ ”ä Šdirectors€cannot€be€considered€independent.€€Plaintiff€allegesŠ $t Šthat€the€Board€"breached€its€obligations€under€Maryland€lawŠ “  Šactively€to€seek€and€secure€the€best€price€reasonably€availableŠ D”" Šfor€the€stockholders."€Plaintiff's€particular€assertions€revolveŠ Ō $$ Šaround€what€he€sees€as€the€Board€ceding€to€Deering€control€overŠ d"“& Šthe€negotiations,€the€failure€to€encourage€and€facilitate€bidsŠ ō#D( Šfrom€Companies€A€and€B,€and€informing€GGP€that€as€long€as€its€bidŠ „%Ō * Šwas€"aggressive€and€attractive",€the€Rouse€Board€would€quicklyŠ 'd", Šact€on€it.Š ¤(ō#. Šą@..ąAt€this€point,€it€appears€to€the€Court€that€Plaintiff€will€have€aŠ 4*„%0 Švery€difficult€time€establishing€any€omissions€of€disclosure€thatŠ ° Šwill€be€considered€material€in€the€overall€context€of€the€actualŠ @ Šdisclosures€made€to€the€stockholders€in€the€Proxy€Statement.€Š Š  ŠEach€stockholder€was€sent€a€135„page€document€that€containsŠ ` ° Šdetailed€statements€on€the€background€of€the€merger,€the€reasonsŠ š @ Šfor€the€merger,€the€recommendations€of€the€Board,€opinions€of€theŠ € Š  Šfinancial€advisors,€interests€of€certain€persons€in€the€merger,Š `  Šmerger€financing,€and€litigation€relating€to€the€merger.€€In€theŠ  š  Šsection€relating€to€the€reasons€for€the€merger,€there€is€anŠ 0€  Šextensive€discussion€of€the€general€factors€relating€to€theŠ Ą Štransaction,€another€section€on€factors€relating€to€the€specificŠ P  Šterms€of€the€merger€agreement€with€GGP,€and€finally€a€section€onŠ ą0 Špotential€negative€factors€relating€to€the€transaction.€€AmongŠ pĄ Šthe€"negative"€factors€listed€was€the€following:Š P ŠÓÓą8@..ąą8@..ąTwo€leading€publicly€traded€companies€in€the€retail€mall€industryŠ ą Šasked€us€to€extend€the€bid€process€in€order€to€provide€themŠ XØ Šadditional€time€to€evaluate€Rouse€and€to€submit€bids.€€For€the€Š  p Šreasons€noted€above,€however,€our€board€believed€that€there€wereŠ č8 Šsignificant€risks€with€regard€to€price,€certainty€andŠ °  Šconfidentiality€in€extending€the€sale€process€and€that€to€do€soŠ xČ! Šwould€not€be€in€the€best€interests€of€our€stockholders.Š @" ŠĢProxy€Statement,€p.31.Š Š $ ŠĢÓÓą@..ąAgainst€this€background,€it€is€incumbent€on€the€Plaintiff€toŠ `"°& Šaffirmatively€make:Š š#@( ŠÓÓą8@..ąą8@..ą[a]€showing€of€a€substantial€likelihood€that,€under€all€of€theŠ €%Š * Šcircumstances,€the€omitted€fact€would€have€assumed€actualŠ H&˜!+ Šsignificance€in€the€deliberations€of€a€reasonable€shareholder.Š '`", ŠPut€another€way,€there€must€be€a€substantial€likelihood€that€theŠ Ų'(#- Šdisclosure€of€the€omitted€fact€would€have€been€viewed€by€theŠ  (š#. Šreasonable€investor€as€having€significantly€altered€the€"totalŠ h)ø$/ Šmix"€of€information€available.Š 0*€%0 ŠĢÓÓņņRosenblatt€v.€Getty€Oil€Co.,óó€493€A.2d€929,€944€(Del.€1985)Š Ą+'2 Š(internal€citations€omitted).€€See€also,€ņņSkeen€v.€Jo„Ann€Stores,Š ° ŠInc.óó,€750€A.2d€1170€(Del.€2000);€ņņHudson€v.€Prime€Retail,€Inc.óó,Š @ ŠNo.€24„C„03„5806,€2004€WL€1982383€(Md.€Cir.€Ct.,€Baltimore€City,Š Š  ŠApril,€2004).€Š ` ° Šą@..ąPlaintiff€focuses€on€the€fact€that€the€Rouse€Board€did€not€obtainŠ š @ Šbids€from€Companies€A€and€B€prior€to€reaching€an€agreement€withŠ € Š  ŠGGP,€and€in€Plaintiffššs€view,€the€Proxy€Statement€does€notŠ `  Šadequately€explain€why€this€happened.€€It€is€this€centralŠ  š  Šallegation€that€permeates€all€of€Plaintiffššs€other€assertions.Š 0€  Šą@..ąPlaintiffššs€perceptions€of€the€Rouse€Boardššs€actions€or€Š Ą Šomissions€are€colored€by€his€attempts€to€import€selectedŠ P  Šprinciples€gleaned€from€Delaware€case€law€and€then€fashioningŠ ą0 Šthem€into€a€template€to€impose€upon€Rouse,€a€MarylandŠ pĄ Šcorporation.Š P Šą@..ąPlaintiffs€assert€that€ņņRevlon€v.€MacAndrews€&€Forbes€Holdings,Š ą ŠIncóó,€506€A.2d€173€(Del.€1986)€imposes€certain€so„called€"RevlonŠ  p Šduties"€that€require€directors€to€attempt€to€secure€the€"best"Š °  Šmerger€terms€available€for€stockholders€after€determining€that€aŠ @" Šcompany€will€be€sold.€€"The€directors€must€focus€on€one€primaryŠ Š $ Šobjective,€which€is€to€secure€the€transaction€offering€the€bestŠ `"°& Švalue€reasonably€available€for€the€stockholders„„and€they€mustŠ š#@( Šexercise€their€fiduciary€duties€to€further€that€end."€€€ņņParamountŠ €%Š * ŠComm.€Inc.€V.€QVC€Networkóó,€637€A.2d€34,€44€(Del.€1994).€Š '`", ŠPlaintiff€asserts€that€the€Board€must€act€in€a€neutral€manner€toŠ  (š#. Šencourage€the€highest€possible€price€for€shareholders.€ņņ€Barkan€v.Š 0*€%0 ŠAmsted€Indus.óó,€567€A.2d€1279,€1286€(Del.€1989).€€In€Plaintiff'sŠ Ą+'2 Šview,€cases€such€as€ņņRevlonóó€and€ņņMills€Acquisition€Co.€v.Š ° ŠMacMillian,€Inc.óó,€559€A.2d€1261€(Del.€1989)€demand€that€the€CourtŠ @ Šconduct€"rigorous€scrutiny"€of€"disparate€treatment"€of€potentialŠ Š  Šbidders.€€Plaintiffššs€Renewed€Motion,€p.21.€€Adopting€this€view,Š ` ° ŠPlaintiff€can€find€no€justification€for€proceeding€to€close€theŠ š @ Štransaction€with€GGP€prior€to€obtaining€firm€bids€from€CompaniesŠ € Š  ŠA€and€B€and€perhaps€shopping€Rouse€to€other€potential€bidders.Š `  Šą@..ąRegardless€of€whether€Plaintiff's€rendition€of€Delaware€law€isŠ  š  Šaccurate,€the€fact€remains€that€it€is€Maryland€law€that€governs€aŠ 0€  ŠMaryland€corporation€like€Rouse€and€its€Board.Š Ą Šą@..ąUnder€Maryland€law,€the€conduct€of€a€company's€directors€isŠ P  Šgoverned€by€Section€2„405.1€of€the€Corporations€and€AssociationsŠ ą0 ŠArticle€of€the€Annotated€Code€of€Maryland.€€Section€2„405.1(a)Š pĄ Šstates:Š P ŠÓÓą8@..ąą8@..ąA€director€shall€perform€his€duties€as€a€director,€including€hisŠ ą Šduties€as€a€member€of€a€committee€of€the€board€on€which€heŠ XØ Šserves:€€(1)€In€good€faith;€(2)€In€a€manner€he€reasonablyŠ  p Šbelieves€to€be€in€the€best€interest€of€the€corporation;€and€(3)Š č8 ŠWith€the€care€that€an€ordinarily€prudent€person€in€a€likeŠ °  Šposition€would€use€under€similar€circumstances.Š xČ! ŠĢÓÓSection€2„405.1(b)(1)€provides:Š  X# ŠÓÓą8@..ąą8@..ąIn€performing€his€duties,€a€director€is€entitled€to€rely€on€anyŠ ˜!č% Šinformation,€opinion,€report,€or€statement,€including€anyŠ `"°& Šfinancial€statement€or€other€financial€data,€prepared€orŠ (#x' Špresented€by€...€(ii)€a€lawyer,€certified€public€accountant,€orŠ š#@( Šother€person,€as€to€a€matter€which€the€director€reasonablyŠ ø$ ) Šbelieves€to€be€within€the€personššs€professional€or€expertŠ €%Š * Šcompetence.Š H&˜!+ ŠĢÓÓą@..ą"Under€the€business€judgment€rule,€there€is€a€presumption€thatŠ Ų'(#- Šdirectors€of€a€corporation€acted€in€good€faith€and€in€the€bestŠ h)ø$/ Šinterest€of€the€corporation."€€ņņWittman€v.€Crookeóó,€120€Md.€App.Š ų*H&1 Š369,€376€(1998).€Š ° Šą@..ąA€leading€commentator€on€Maryland€Corporate€Law€describes€theŠ @ Šcorporate€director's€obligation€as€follows:Š Š  ŠÓÓą8@..ąą8@..ąIn€seeking€to€maximize€stockholder€value,€whether€because€of€aŠ ` ° ŠRevlon€obligation€or€not,€the€directorsšš€actions€will€be€governedŠ ( x Šby€the€standard€of€Section€2„405.1(a).€€Thus,€the€board€hasŠ š @ Šreasonable€latitude€in€determining€how€to€go€about€maximizingŠ ø   Šshareholder€value.€Even€in€a€change€of€control,€it€may€beŠ € Š  Šreasonable€for€a€board€to€enter€into€an€agreement€after€arm's„Š H ˜  Šlength€negotiations,€rather€than€"shopping"€the€company€if€theŠ `  Šboard,€in€good€faith€and€with€a€reasonable€basis,€concludes€thatŠ Ų(  Šthat€process€is€likely€to€yield€the€best€price€and€other€termsŠ  š  Šreasonably€available.€€Indeed€a€board€may€favor€one€bidder€overŠ hø  Šanother€in€various€respects€if€it€can€be€shown€that€theŠ 0€  Šstockholders'€interests€would€be€advanced.€However,€in€a€changeŠ ųH  Šof€control,€any€process€that€does€not€involve€some€demonstrableŠ Ą Šmarket€check,€even€post€agreement,€may€be€difficult€to€uphold.Š ˆŲ ŠĢą8@..ąą8@..ąA€director's€acts€in€connection€with€the€foregoing€are€"presumedŠ h Što€satisfy€the€standards"€established€by€Section€2„405.1(a),€andŠ ą0 Š"may€not€be€subject€to€a€higher€duty€of€greater€scrutiny€than€isŠ Øų Šapplied€to€any€other€act€of€a€director."€[quoting€Section€2„Š pĄ Š405.1(f)]Š 8ˆ Š€€Š P ŠÓÓJames€J.€Hanks,€Jr.,€Maryland€Corporation€Law€Sec.6.6(b)€(2003€Š Č ŠSupplement)€(footnotes€omitted).Š XØ Šą@..ąMaryland€law€is€less€restrictive€than€the€view€of€Delaware€lawŠ č8 Šthat€Plaintiff€espouses.€€Maryland€does€not€require€an€auctionŠ xČ! Šwhen€the€decision€is€made€to€sell€a€corporation.€€There€is€noŠ  X# Šrequirement€that€the€Board€fully€shop€the€company€to€multipleŠ ˜!č% Šbidders€and€have€a€so„called€"level€playing€field"€for€allŠ (#x' Šbidders.€€There€will€be€a€need€to€market„check€or€test€theŠ ø$ ) ŠBoardššs€decision,€but€the€Board€is€free€to€lock€up€an€attractiveŠ H&˜!+ Šdeal€and€use€post„agreement€methods€to€do€so.Š Ų'(#- Šą@..ąIt€should€also€be€noted€that€a€more€nuanced€reading€of€DelawareŠ h)ø$/ Šlaw€than€Plaintiff€has€presented€would€show€that€this€transactionŠ ų*H&1 Šis€within€the€range€of€the€types€of€transactions€that€wouldŠ ° Šlikely€be€approved,€even€for€a€Delaware€corporation.€€WhileŠ @ ŠņņRevlonóó€requires€a€board€to€get€the€best€short„term€price€forŠ Š  Šstockholders€in€a€sale€of€control,€ņņRevlonóó,€506€A.2d€at€182,€itŠ ` ° Š"does€not€demand€that€every€change€in€control€of€a€DelawareŠ š @ Šcorporation€be€preceded€by€a€heated€bidding€contest."Ł3 H ˜  Ł×ƒׯ ƒ’’ŻņņŚ  Ś3Ś  ŚóóŻ  Ż×  ×ŲŲŁ3 ŠtheŁ€ņņBarkan€v.Š € Š  ŠAmsted€Indus.,€Inc.óó€567€A.2d€1279,€1286€(Del.€1989).€€TheŠ `  ŠDelaware€Supreme€Court€has€held€that€a€board€can€fulfill€its€dutyŠ  š  Što€obtain€the€best€transaction€reasonably€available€by€enteringŠ 0€  Šinto€a€merger€agreement€with€a€single€bidder,€establishing€aŠ Ą Š"floor"€for€the€transaction,€and€then€testing€the€transactionŠ P  Šwith€a€post„agreement€market€check.€ņņ€Id.óó€at€1287;€see€also€ņņIn€reŠ ą0 ŠMONY€Group€Inc.€Shareholder€Litigationóó,852€A.2d€9,€19(Del€Ch.Š pĄ Š2004).Š P Šą@..ąEven€applying€the€so„called€enhanced€judicial€scrutiny€test,€theŠ ą ŠDelaware€courts€have€acknowledged€that€there€are€many€businessŠ  p Šand€financial€considerations€implicated€in€investi„gating€andŠ °  Šselecting€the€best€value€reasonably€available€and€that€the€board,Š @" Šthe€corporate€decision„making€body,€is€best€equipped€to€makeŠ Š $ Šthese€judgments.€ņņ€Paramount€Communications,€Inc.€v.€QVC€Network,Š `"°& ŠInc.óó,€637€A.2d€34,€45€(Del.€1994).Š š#@( ŠÓÓą8@..ąą8@..ąAccordingly,€a€court€applying€enhanced€judicial€scrutiny€shouldŠ €%Š * Šbe€deciding€whether€the€directors€made€ņ ņa€reasonableó ó€decision,€notŠ ° Šņ ņa€perfectó ó€decision.€€If€a€board€selected€one€of€severalŠ zŹ Šreasonable€alternatives,€a€court€should€not€second„guess€thatŠ D” Šchoice€even€though€it€might€have€decided€otherwise€or€subsequentŠ  \ Ševents€may€have€cast€doubt€on€the€boardššs€determination.€Š Ō$ ŠĢÓÓņņIdóó.€(emphasis€in€original).€€See€also,€ņņIn€re€MONY€Group€Inc.,óó€852Š d “ ŠA.2d€at€20.Š ō D Šą@..ąIt€appears€that€the€Rouse€Board€or€its€agents€made€a€decision€toŠ „ Ō  Štalk€at€various€points€to€Company€A,€Company€B€and€GGP€beforeŠ d  Šconsummating€a€deal€with€GGP.€€It€did€not€treat€them€all€theŠ ¤ō  Šsame,€but€there€is€no€indication€that€the€actions€taken€were€notŠ 4„  Šreasonable.€€At€some€point,€the€Board€made€the€decision€to€tellŠ Ä ŠGGP€that€the€Board€could€act€quickly€if€GGP€could€€present€anŠ T¤ Š"aggressive€and€attractive"€price.€It€was€the€BoardššsŠ ä4 Šdetermination€that€GGP€had€met€the€mark€set,€and€it€agreed€toŠ tÄ Šconsummate€the€deal.€€This€may€not€have€been€the€"perfect€deal"Š T Šor€even€the€"best€deal",€but€there€is€no€indication€of€recordŠ ”ä Šthat€it€was€not€a€"reasonable€deal".€€€Under€Maryland€law,€noŠ $t Šmore€is€demanded,€and€this€Court€should€not€second„guess€theŠ “  Šdetermination€by€interposing€an€injunction€that€prevents€theŠ D”" Šstockholders€from€rendering€their€own€verdict€on€the€BoardššsŠ Ō $$ Šmethods€and€ultimate€judgment.Š d"“& Šą@..ąThere€can€be€no€complaint€that€Rouse€did€not€market„check€theŠ ō#D( Šdeal.€€Its€negotiations€with€Companies€A€and€B,€although€notŠ „%Ō * Špushed€to€final€bids,€gave€it€a€realistic€sense€of€where€theŠ 'd", Šmarket€was.€€It€confirmed€this€with€the€opinions€of€its€financialŠ ¤(ō#. Šadvisors€that€are€fully€set€out€in€the€Proxy€Statement.€€As€notedŠ 4*„%0 Šbelow€in€Part€VI,€the€market€response€after€the€announcement€ofŠ ° Šthe€deal€also€gave€some€sense€of€how€on„target€the€deal€was.€Š @ ŠFinally,€the€deal€was€consummated€with€a€"fiduciary€out"Š Š  Šprovision€which€allows€Rouse€to€terminate€the€agreement€andŠ ` ° Šaccept€a€superior€bid€from€another€suitor.€€A€"break€up"€orŠ š @ Štermination€fee€of€up€to€$155€million€and€up€to€$25€million€inŠ € Š  Šexpense€reimbursement€would€have€to€be€paid€to€GGP€in€thatŠ `  Šinstance.€€The€Board€received€advice€from€both€its€financial€andŠ  š  Šlegal€advisors€that€the€size€of€the€fee,€given€the€size€of€theŠ 0€  Šoverall€transaction,€should€not€preclude€another€party€fromŠ Ą Šmaking€a€competing€proposal.€€Counsel€for€Defendants€calculatesŠ P  Šthat€the€size€of€the€fee€in€this€case€to€be€2.5€percent€and€"isŠ ą0 Šsquarely€within€the€range€[2%€to€4%]€that€has€been€approved€byŠ pĄ Šthe€courts",€even€those€applying€"heightened€scrutiny"€underŠ P ŠņņRevlonóó.€€€Counsel€for€Defendants€also€represented€at€argumentŠ ą Šbefore€the€Court€that€there€have€not€been€other€bidders€comingŠ  p Šforward€with€new€proposals€or€bids€since€the€August€announcementŠ °  Šof€the€deal.€€The€Court€has€no€reason€upon€this€record€toŠ @" Šconclude€that€this€post„agreement€€market€check,€€together€withŠ Š $ Šthe€other€steps€taken,€is€not€sufficient€to€satisfy€Maryland€lawŠ `"°& Šrequirements.Š š#@( Šą@..ąWith€an€understanding€of€the€legal€standard€that€applies€to€aŠ €%Š * Šsale€of€a€corporation€in€Maryland,€it€becomes€easier€to€assessŠ '`", Šwhat€is€required€to€be€disclosed€to€the€stockholders€so€that€theyŠ  (š#. Šare€able€to€make€an€informed€decision.€The€focus€is€on€what€theŠ 0*€%0 ŠBoard€has€recommended,€not€what€is€the€"best"€theoretical€deal€orŠ Ą+'2 Šwhether€other€possible€bidders€were€treated€differentially€fromŠ ° Šthe€successful€bidder.€€Stated€another€way,€the€emphasis€is€onŠ @ Šwhat€the€Board€actually€did,€not€what€it€could€have€done€had€itŠ Š  Štraveled€a€different€road.Š ` ° Šą@..ąSuch€š šwhyšš€questions€about€decisions€not€to€pursue€other€possibleŠ š @ Šoptions€are€generally€not€material,€even€under€DelawareššsŠ € Š  Šenhanced€scrutiny€standard.€€ņņIn€re€Lukens,€Inc.€Sššholders€Litig.óó,Š `  Š757€A.2d€720,€736€(Del.€Ch.€1999).€€With€this€understood,€itŠ  š  Šbecomes€clear€under€the€less€restrictive€Maryland€law€that€theŠ 0€  Šanswers€to€the€"why"€questions€posed€by€the€Plaintiff€about€notŠ Ą Šproviding€a€š šlevel€playing€fieldšš€to€Companies€A€and€B€are€notŠ P  Šmaterial€to€the€issue€of€whether€the€stockholders€should€voteŠ ą0 Š"yes"€or€"no"€on€November€9€on€the€GGP/Rouse€merger.Š pĄ Šą@..ąPlaintiff€makes€a€stab€at€asserting€that€the€Rouse€Board€cededŠ P Šdecision„making€to€Deering,€that€some€Board€members€hadŠ ą Šconflicting€loyalties,€and€that€some€directors€should€not€beŠ  p Šviewed€as€independent.€€Again,€Plaintiff€relies€on€the€ProxyŠ °  ŠStatement€itself€to€support€the€allegations,€and€alleges€no€newŠ @" Šfacts€not€disclosed€that€show€any€abdication€or€lack€of€loyalty.€Š Š $ ŠTo€enter€an€injunction€at€this€stage,€it€should€be€clear€to€theŠ `"°& ŠCourt€that€the€conflicts€are€"of€a€sufficiently€materialŠ š#@( Šimportance"€that€it€is€"improbable€that€the€director€couldŠ €%Š * Šperform€her€fiduciary€duties."€€ņņIn€re€General€Motors€Class€HŠ '`", ŠShareholders€Litigationóó,€734€A.2d€611,€617€(Del.€Ch.€1999).€TheŠ  (š#. ŠCourt€has€not€found€that€to€be€the€case€here,€based€on€the€factsŠ 0*€%0 Šcurrently€before€the€Court.Š Ą+'2 Šą@..ąAs€Defendants€point€out,€this€is€not€a€case€where€the€boardŠ ° Šmembers€are€entrenching€themselves€against€a€hostile€take„overŠ @ Šand€where€one€can€be€reasonably€suspicious€of€their€motives€forŠ Š  Šclinging€to€their€positions€or€benefits.€€Here,€they€are€puttingŠ ` ° Šthemselves€out€of€jobs,€and€while€they€will€profit€handsomelyŠ š @ Šfrom€their€ownership€of€stocks,€this€profit€will€be€of€the€kindŠ € Š  Šexperienced€by€other€stockholders.€€To€the€extent€there€is€anyŠ `  Švariance,€it€has€been€adequately€disclosed€in€the€ProxyŠ  š  ŠStatement,€particularly€in€the€section€dealing€with€potentialŠ 0€  Šconflicts.€€On€the€record€before€this€Court,€there€is€noŠ Ą Šdisabling€conflict€or€shift€of€loyalty€shown€that€at€this€stageŠ P  Šwould€cause€the€Court€to€halt€the€stockholders€from€expressingŠ ą0 Štheir€views€on€the€Boardššs€recommendation.€Š pĄ Šą@..ąPlaintiff€has€also€asserted€that€the€Defendants€have€failed€toŠ P Šprovide€sufficient€financial€detail€utilized€by€the€financialŠ ą Šadvisors.€€Defendants€have€demonstrated€that€the€"discounted€cashŠ  p Šflow"€analysis€done€by€Deutsche€Bank€(pp.35„36€of€the€ProxyŠ °  ŠStatement)€and€by€Goldman€Sachs€(p.41€of€the€Proxy€Statement)Š @" Šdisclose€the€time€period€used,€the€range€of€capitalization€ratesŠ Š $ Šused€to€calculate€the€"terminal€value"€at€the€end€of€the€period,Š `"°& Šthe€range€of€"discount€rates"€used€to€calculate€the€range€ofŠ š#@( Š"present€values"€and,€most€importantly,€the€range€of€"presentŠ €%Š * Švalues"€derived€from€the€analysis€($51.06€to€$70.26€per€share€inŠ '`", ŠDeutsche€Bank's€analysis€and€$50.42€to€$62.63€in€Goldman€Sach'sŠ  (š#. Šanalysis).Š 0*€%0 Šą@..ąAdditionally,€in€the€analysis€done€by€each€advisor,€they€compareŠ Ą+'2 ŠRouse€to€a€number€of€similar€companies€and€the€proposedŠ ° Štransaction€between€Rouse€and€GGP€to€a€number€of€similarŠ @ Štransactions.€€See€pp.€33„35,€38„39€and€40„41€of€the€ProxyŠ Š  ŠStatement.€€All€of€the€companies€deemed€similar€are€identified€byŠ ` ° Šname;€all€transactions€deemed€similar€are€identified€by€both€nameŠ š @ Šof€acquirer€and€name€of€target;€the€ranges€of€various€financialŠ € Š  Šcharacteristics€of€the€similar€companies€are€presented;€andŠ `  Šfinally,€the€ranges€of€premiums€paid€in€similar€transactions€areŠ  š  Špresented.€€Labeling€these€analyses€as€inadequate€to€meet€minimumŠ 0€  Šdisclosure€standards€is€a€hard€task,€and€Plaintiff€retreats€toŠ Ą Šasserting€that€the€"discounted€cash€flows"€are€defective€in€thatŠ P  Šthey€do€not€contain€the€confidential€internal€Rouse€projectionsŠ ą0 Šupon€which€they€are€based.€€In€the€context€of€what€was€disclosed,Š pĄ Šthe€Court€does€not€find€this€to€be€a€sufficient€basis€to€say€thatŠ P Šthe€Proxy€Statement€does€not€meet€the€disclosure€requirements.€Š ą ŠņņMacMillian€v.€Intercargo€Corp.óó,€1999€WL€288128€at€*6€(Del€Ch.€MayŠ  p Š3,€1999).Š °  Šą@..ąPlaintiff€has€submitted€the€affidavits€of€two€experts,€M.€TravisŠ @" ŠKeath€and€Candace€Preston,€to€support€his€allegation€thatŠ Š $ Šadditional€financial€data€should€be€disclosed€to€allow€a€fairŠ `"°& Ševaluation.€€These€experts€have€examined€the€proxy€statement€andŠ š#@( Šthe€opinions€of€Deutsche€Bank€and€Goldman€Sachs.€€They€areŠ €%Š * Šcritical€of€the€methodology€used€by€the€advisors€and€assert€thatŠ '`", Šthere€are€š šerrorsšš€in€certain€statements€made€in€their€analyses.€Š  (š#. ŠWhile€it€is€true€that€certain€minor€errors€were€made,€such€as€aŠ 0*€%0 Šmisstatement€of€dates,€none€of€these€appear€at€this€time€to€beŠ Ą+'2 Šones€that€materially€alter€the€financial€advisorsšš€conclusions€orŠ ° Šaffect€their€opinions.€€Plaintiffššs€experts€are€free€to€beŠ @ Šcritical€of€the€financial€advisors€and€provide€their€own€opinionŠ Š  Šand€perspective.€€However,€at€this€stage,€the€Keath€and€PrestonŠ ` ° Šaffidavits€do€not€convince€this€Court€that€fuller€disclosure€ofŠ š @ Šfinancial€information€is€required€to€adequately€advise€theŠ € Š  Šstockholders€prior€to€a€vote.Š `  Šą@..ąFinally,€Plaintiff€is€critical€of€the€Defendants€for€employingŠ  š  Štwo€financial€advisors,€paying€them€"high€sums",€and€having€partŠ 0€  Šof€their€compensation€contingent€on€the€deal€closing.€€PlaintiffŠ Ą Šwants€to€know€"why"€this€happened.€€It€is€hard€to€see€howŠ P  ŠDefendants€have€not€been€candid€about€this,€since€the€informationŠ ą0 ŠPlaintiff€relies€on€was€gleaned€from€the€Proxy€Statement€itself,Š pĄ Ša€sign€certainly€that€the€information€was€adequately€disclosedŠ P Šand€is€fairly€before€the€stockholders€for€a€vote.Š ą Šą@..ąPlaintiff€presents€no€credible€basis€for€this€Court€to€concludeŠ  p Šthat€the€size€of€the€fee€and€its€contingent€nature€are€out€ofŠ °  Šnormal€bounds€and€a€ground€for€finding€that€Defendants€breachedŠ @" Štheir€duty€of€care.€€Inņņ€Wittman€v.€Crookeóó,€120€Md.€App.€369Š Š $ Š(1998),€the€Court€of€Special€Appeals€was€undisturbed€by€GoldmanŠ `"°& ŠSachs€&€Co.,€the€financial€advisor€to€Baltimore€Gas€and€ElectricŠ š#@( ŠCompany,€receiving€$8,500,000.00€more€by€recommending€a€merger€toŠ €%Š * Ša€board€than€by€advising€against€it.€€ņņIdóó.€at€378.€€Š '`", Šą@..ąIt€is€ironic€that€Plaintiff€chastises€Defendants€for€employingŠ  (š#. Štwo€financial€advisors€instead€of€one.€€Had€Defendants€employedŠ 0*€%0 Šonly€one€advisor€and€obtained€only€a€single€fairness€opinion,€itŠ Ą+'2 Šcan€be€fairly€assumed€that€Plaintiff€would€then€have€viewed€thatŠ ° Šeffort€as€insufficient€and€a€dereliction€of€Defendants'€dutiesŠ @ Šfor€failing€to€obtain€a€second€opinion.Š Š  Šą@..ąAt€this€juncture,€it€appears€to€the€Court€that€Plaintiff€has€aŠ ` ° Šlow€probability€of€being€able€to€prevail€on€the€merits€of€theŠ š @ Šclaims€he€presses€in€his€preliminary€injunction€motion.€€ThisŠ € Š  Šconclusion€would€require€Plaintiff,€in€the€preliminary€injunctionŠ `  Šcalculus,€to€make€a€very€strong€showing€that€he€will€experienceŠ  š  Šharm€that€will€outweigh€any€harm€to€the€Defendants€or€publicŠ 0€  Šinterest€concerns.Š Ą ŠÓÓņ ņVI.ą@..ąHarm€to€the€Plaintiffó óŠ P  ŠĢÓÓą@..ąPlaintiff€articulates€three€types€of€harm€that€he€will€experienceŠ ą0 Šif€the€preliminary€injunction€is€not€granted.€€First,€PlaintiffŠ pĄ Šstates€that€he€will€be€prevented€from€casting€a€"fully€informedŠ P Švote"€at€the€shareholder€meeting,€a€right€he€characterizes€as€theŠ ą Š"most€powerful€right€that€a€shareholder€possesses".€€Second,Š  p ŠPlaintiff€asserts€that€he€will€be€prejudiced€if€the€vote€proceedsŠ °  Šsince€he€will€not€receive€the€maximum€shareholder€value€if€theŠ @" Šmerger€is€approved€because€other€bidders,€Companies€A€and€B,€wereŠ Š $ Šnot€allowed€to€bid€on€a€"level€playing€field".€€Finally,Š `"°& ŠPlaintiff€asserts€that€without€a€preliminary€injunction,€he€"willŠ š#@( Šforever€lose€[his]€ability€to€participate€in€the€growth€of€RouseŠ €%Š * Šas€a€private€company."Š '`", Šą@..ąPlaintiffššs€personal€ability€to€vote€in€an€informed€manner€hardlyŠ  (š#. Šseems€at€genuine€issue.€€He€and€his€experts€have€deconstructedŠ 0*€%0 Šand€mined€the€Proxy€Statement€to€expose€what€they€believe€are€theŠ Ą+'2 Šinadequacies€of€the€deal€and€what€they€believe€to€be€theŠ ° Šderelictions€of€the€Board.€€It€is€hard€to€believe€that€anyŠ @ Šfurther€disclosure€will€change€or€alter€the€vote€Plaintiff€willŠ Š  Šcast€on€the€present€proposal.Š ` ° Š€€€€€€Plaintiff€also€claims€that€he€will€not€receive€"maximumŠ š @ Šshareholder€value"€because€other€companies€such€as€A€and€B€didŠ € Š  Šnot€have€a€"level€playing€field".€€As€demonstrated€above,€thereŠ `  Šis€no€"level€playing€field"€test€in€Maryland€and€no€requirementŠ  š  Što€conduct€an€auction.€€In€any€event,€Plaintiffššs€logic€desertsŠ 0€  Šhim€here€since€it€is€mere€speculation€that€"A"€or€"B"€or€anyŠ Ą Šother€entity€will€present€a€bid€that€is€superior€to€that€of€GGPŠ P  Šif€an€injunction€is€granted.€€The€record€before€the€CourtŠ ą0 Šdiscloses€no€company€that€has€stepped€forward€since€the€AugustŠ pĄ Šannouncement€to€challenge€the€value€or€make€another€offer.€Š P ŠDefendants€note€that€the€first€trading€day€after€the€transactionŠ ą Šwas€announced,€the€stock€of€GGP€lost€almost€five€percent€of€itsŠ  p Švalue,€a€clear€indicator€to€them€that€the€market€believed€thatŠ °  ŠGGP€was€paying€full€value€to€Rouse€stockholders.€€Defendants€alsoŠ @" Šnote€that€Rouse€stock€has€been€trading€at€approximately€a€dollarŠ Š $ Šper€share€below€the€$67.50,€which€Defendants€read€as€a€furtherŠ `"°& Šindicator€that€the€market€thinks€that€Rouse€was€appropriatelyŠ š#@( Švalued.€€While€one€can€argue€with€Defendants'€conclusions,€theyŠ €%Š * Šare€based€on€some€factual€predicate€which€distinguishes€them€fromŠ '`", ŠPlaintiff's€assertions€that€unknown€bidders€are€eagerly€waitingŠ  (š#. Šin€the€wings€to€offer€more€money€on€similar€or€better€terms.Š 0*€%0 ŠSimply€put,€the€Court€can€put€no€weight€on€Plaintiff's€assertionŠ Ą+'2 Šthat€if€an€injunction€is€granted,€he€and€the€other€stockholdersŠ ° Šwill€be€assured€of€a€bigger€payoff.Š @ Šą@..ąPlaintiff's€assertion€that€he€will€not€be€allowed€to€continue€inŠ Š  Šthe€future€growth€of€Rouse€also€makes€factual€assumptions€thatŠ ` ° Šare€simply€missing€from€this€record.€€While€Plaintiff's€abilityŠ š @ Što€continue€as€a€Rouse€stockholder€and€avoid€the€currently„setŠ € Š  Švote€may€be€something€he€has€a€personal€interest€in,€it€has€onlyŠ `  Šthe€weight€of€a€feather€in€the€weighing€process€that€this€CourtŠ  š  Šmust€conduct.Š 0€  Šą@..ąPlaintiff€attempts€in€his€motion€to€bootstrap€the€harm€he€allegesŠ Ą Što€himself€to€also€apply€to€the€entire€class€of€stockholders€ofŠ P  ŠRouse.€€However,€Plaintiff€has€not€requested€by€motion€that€theŠ ą0 Šclass€be€certified€under€Rule€2„231(c),€and€at€this€stage,€heŠ pĄ Šrepresents€only€his€personal€interest.Š P Šą@..ąTo€the€extent€that€Plaintiff€raises€issues€that€would€beŠ ą Šimportant€and€serious€regarding€deprivation€of€the€stockholderŠ  p Šrights€of€others,€the€Court€could€more€appropriately€factor€thoseŠ °  Šconcerns€into€its€consideration€of€the€overall€public€interest,Š @" Šanother€factor€to€consider€in€whether€to€grant€or€deny€aŠ Š $ Špreliminary€injunction.€€The€Court€will€do€so€below.Š `"°& Šņ ņVII.ą@..ąBalance€of€Convenience€and€Equitiesó óŠ š#@( Šą@..ąPlaintiff's€personal€interests€as€described€above€must€beŠ €%Š * Šbalanced€against€those€that€may€be€suffered€by€Defendants€if€anŠ '`", Šinjunction€is€granted.€€Enjoining€the€vote€will€at€a€minimumŠ  (š#. Šcause€delay€and€disruption€in€the€completion€of€the€transaction.€Š 0*€%0 ŠThere€are€obvious€transactional€costs€in€re„doing€the€stockholderŠ Ą+'2 Švote€that€are€clearly€substantial€in€a€publicly„traded€companyŠ ° Šwith€a€great€number€of€stockholders.€€As€Defendants€note,€on€theŠ @ Špremium€alone,€each€day€of€delay€in€closing€the€transaction€costsŠ Š  Šthe€stockholders€of€Rouse€approximately€$50,000.00€for€eachŠ ` ° Špercentage€point€of€interest€they€could€be€earning€if€they€hadŠ š @ Šthe€money.€Finally,€Defendants€assert€that€under€the€terms€of€theŠ € Š  Šdeal€with€GGP,€entry€of€a€court€order€may€provide€an€opening,€ifŠ `  Šother€contingencies€occur,€for€GGP€to€withdraw€from€theŠ  š  Štransaction,€which€would€deprive€Rouse€and€its€stockholders€ofŠ 0€  Šthe€premium€altogether.Š Ą Šą@..ąIf€Plaintiff's€demonstrable€immediate€harm€were€more€certain€andŠ P  Šless€nebulous,€the€Court€would€have€something€to€add€to€theŠ ą0 Šbalance€that€might€begin€to€move€the€scales.€€At€this€point,€theŠ pĄ ŠCourt€discerns€little€weight€this€Plaintiff€can€provide.€€TheŠ P Šbalance€is€decisively€in€Defendants'€favor.Š ą Šņ ņVIII.€Public€Interestó óŠ  p Šą@..ąThis€is€the€place,€in€this€Court's€view,€where€the€interest€ofŠ °  Šthe€stockholders€of€this€publicly„held€corporation€who€are€notŠ @" Šparties€should€be€considered.€€They€obviously€have€an€interest€atŠ Š $ Šstake€in€the€Court's€determination.€€Plaintiff€clearly€seesŠ `"°& Šhimself€as€pursuing€the€interest€of€all€shareholders€even€thoughŠ š#@( Šthe€Court€has€not€established€the€case€as€a€class€action.€Š €%Š * ŠRegardless,€the€Court€should€factor€into€its€consideration€howŠ '`", Šits€decision€would€affect€the€other€stockholders€not€representedŠ  (š#. Šin€the€action.Š 0*€%0 Šą@..ąWhile€the€Proxy€Statement€may€not€be€perfect€or€as€detailed€asŠ Ą+'2 Šthe€Plaintiff€would€like,€it€appears€at€this€stage€to€put€beforeŠ ° Šthe€stockholders€the€salient€issues€they€should€consider€whenŠ @ Šthey€vote€on€November€9ņņthóó.€€If€the€merger€is€approved,€they€wouldŠ Š  Šbecome€entitled€to€receive€the€32%€premium.€€There€is€noŠ ` ° Šguarantee€that€the€adverse€contingencies€that€could€come€aboutŠ š @ Šfrom€delay€will€not€occur.Š € Š  Šą@..ąWhile€the€Court€must€protect€stockholder€rights€from€illegalŠ `  Šactions€by€an€unfaithful€or€less€than€diligent€Board,€the€CourtŠ  š  Šmust€also€carefully€weigh€whether€judicial€intervention€intoŠ 0€  Šcorporate€affairs€is€wise.€€The€admonition€that€applies€toŠ Ą Šphysicians€deciding€to€treat€a€patient€is€perhaps€alsoŠ P  Šappropriate€here:€"First,€do€no€harm."€€The€Court€is€not€at€allŠ ą0 Šconvinced€that€Plaintiff€has€demonstrated€that€judicialŠ pĄ Šintervention€here€would€advance€the€interests€espoused€byŠ P ŠMaryland€corporate€law€or€serve€the€best€interests€of€RouseŠ ą Šstockholders.Š  p Šą@..ąA€similar€sentiment€was€articulated€in€an€opinion€by€the€Court€ofŠ °  ŠChancery€of€Delaware€in€denying€a€preliminary€injunction€toŠ @" Šprevent€the€closing€of€a€tender€offer:Š Š $ ŠÓÓą8@..ąą8@..ą[T]he€balance€of€harm€in€this€situation€in€which€there€is€noŠ `"°& Šalternative€transaction€and€issuance€of€the€injunctionŠ (#x' Šinescapably€involves€a€risk€that€the€shareholders€will€lose€theŠ š#@( Šopportunity€to€cash€in€their€investment€at€a€substantial€premiumŠ ø$ ) Šrequires€not€only€a€special€conviction€about€the€strength€of€theŠ €%Š * Šlegal€claim€asserted,€but€also€a€strong€sense€that€the€risks€inŠ H&˜!+ Šgranting€the€preliminary€relief€of€a€untoward€financial€resultŠ '`", Šfrom€the€stockholders'€point€of€view€is€small.€Repeatedly€theŠ Ų'(#- Šplaintiffs'€class€action€bar€exhorts€the€court€to€bravely€riskŠ  (š#. Šthe€consequences€in€circumstances€such€as€these,€asserting€thatŠ h)ø$/ Šmore€money€to€the€shareholders,€not€less,€will€probably€result.Š 0*€%0 ŠAt€least€on€facts€such€as€these,€a€due€respect€for€the€interestsŠ ų*H&1 Šof€the€class€on€whose€behalf€these€exhortations€are€made,Š Ą+'2 Šrequires,€in€my€judgment,€that€this€invitation€be€declined.Š ° ŠĢÓÓņņSolash€v.€Telex€Corporationóó,€1988€WL€3587€at€*13€(Del.€Ch),€13Š @ ŠDel.J.Corp.L.€1250,€1269€(January€19,€1988).Š Š  Šą@..ąFor€the€same€reasons,€the€Court€will€for€now€decline€Plaintiff'sŠ ` ° Šsuggestion€that€judicial€intervention€would€be€in€the€publicŠ š @ Šinterest.Š € Š  Šņ ņIX.ą@..ąPlaintiffššs€Ability€to€Post€a€Bondó óŠ `  Šą@..ąPlaintiff€acknowledges€that€a€bond€by€the€moving€party€isŠ  š  Šenvisioned€if€a€preliminary€injunction€is€granted,€Maryland€RuleŠ 0€  Š15„503,€but€Plaintiff€asserts€that€the€Court€may€in€theŠ Ą Šappropriate€case€either€dispense€with€requiring€any€bond€orŠ P  Šrequire€at€most€a€nominal€bond.€€An€affidavit€from€the€PlaintiffŠ ą0 Šasserts€that€a€bond€in€excess€of€$10,000.00€would€not€be€able€toŠ pĄ Šbe€posted.€€Jasinover€Affidavit,€paragraph€4.€€WhileŠ P Šacknowledging€that€the€Court€has€considerable€discretion€in€theŠ ą Šmatter€of€bond,€Maryland€Rule€15„503(c),€Defendants€vehementlyŠ  p Šargue€that€a€substantial€bond€should€be€required€if€injunctiveŠ °  Šrelief€is€granted,€since€delaying€the€stockholders'€vote€and€theŠ @" Šclosing€of€the€transaction€could€cost€significant€economic€harmŠ Š $ Što€the€Defendants€and€to€other€non„party€stockholders,€and€couldŠ `"°& Šin€fact€in€some€circumstances€allow€Defendant€GGP€to€withdrawŠ š#@( Šfrom€the€transaction€under€the€terms€of€the€merger€agreement.Š €%Š * ŠDefendants€assert€that€in€a€worst€case€scenario,€the€harm€couldŠ '`", Šreach€the€amount€of€$12.6€Billion€Dollars,€the€total€value€of€theŠ  (š#. Štransaction€or,€alternatively,€at€least€the€value€of€the€premiumŠ 0*€%0 Šoffered€by€GGP,€$1.8€billion.€€Were€the€Court€otherwise€persuadedŠ Ą+'2 Što€enter€the€relief€suggested€by€Plaintiff,€the€Court€believesŠ ° Šsome€substantial€bond€would€be€necessary€to€be€posted€to€protectŠ @ Šthe€Defendants€in€the€event€Plaintiff€is€not€ultimately€able€toŠ Š  Šprevail.€€While€Defendants'€suggestion€of€a€multi„billion€dollarŠ ` ° Šbond€may€be€excessive€and€inflated€by€hyperbole,€a€bond€in€someŠ š @ Šlesser€amount,€but€certainly€in€the€millions€of€dollars,€wouldŠ € Š  Šlikely€be€in€order.€€Since€Plaintiff€has€candidly€indicated€theŠ `  Šupper€limits€of€his€ability€to€post€bond€and€since€that€limit€isŠ  š  Špatently€inadequate,€this€factor€alone€becomes€another€reason€whyŠ 0€  ŠPlaintiff€cannot€prevail€on€the€motion.Š Ą Šņ ņX.ą@..ąConclusionó óŠ P  Šą@..ąPlaintiff€has€suggested€that€an€injunction€should€be€granted€nowŠ ą0 Šbefore€it€is€š šimpossible€to€unscramble€the€eggsšš€after€the€vote,Š pĄ Šciting€ņņIn€re€Lukens€Inc.€Sššholders€Litigóó.,€757€A.2d€720,€728Š P Š(Del.€Ch.€1999).€€While€this€sentiment€is€on€target€in€someŠ ą Šcases,€it€is€not€on€the€facts€currently€before€the€Court.€€OnŠ  p Šthese€facts,€the€Rouse€stockholders€should€be€given€the€š šeggsšš,Š °  Šand€they€can€be€trusted€to€make€a€sufficiently„informed€decisionŠ @" Šwhether€to€scramble€them€now€or€put€them€safely€back€in€theŠ Š $ Šrefrigerator€for€another€day.€€Š `"°& Šą@..ąWeighing€and€balancing€the€factors€applicable€to€granting€aŠ š#@( Špreliminary€judgment,€this€Court€is€firmly€convinced€that€aŠ €%Š * Špreliminary€injunction€should€not€be€granted.€€For€these€reasons,Š '`", Šit€is,€this€ņņ€€€4ņņthó󀀀óó€day€of€November,€2004,€Š  (š#. Šą@..ąORDERED,€that€Plaintiff's€Motion€for€Preliminary€Injunction€isŠ 0*€%0 Šdenied.Š Ą+'2 ŠÓÓą0@..ąą0@..ąą0@..ąą0@..ąą0@..ąą0@..ąą0@..ąą@..ąą@..ąą@..ąą@..ąą@..ąą@..ąą@..ąą@..ąą@..ąą@..ąą@..ąą@..ąą@..ąą@..ąņņ€€€€€€€€€€€€€€€€€€€€€€€€€€€€€ą@..ą€óóŠ ° Šą0@..ąą0@..ąą0@..ąą0@..ąą0@..ąą0@..ąą0@..ąą@..ąą@..ąą@..ąą@..ąą@..ąą@..ąą@..ąą@..ąą@..ąą@..ąą@..ąą@..ąą@..ąą@..ą€€€Dennis€M.€Sweeney,Š xČ Šą0@..ąą0@..ąą0@..ąą0@..ąą0@..ąą0@..ąą0@..ąą0@..ąą@..ąą@..ąą@..ąą@..ąą@..ąą@..ąą@..ąą@..ąą@..ąą@..ąą@..ąą@..ąą@..ąą@..ąą@..ąą@..ąJudgeŠ @ ŠĢÓ6"° °` pČ xŠ (#°°X6ÓĢCopies€Faxed€and€Mailed€ņņ€€€€€€€€€€€€€€€óó€to:ą@..ąŠ ˜č ŠĢPatrick€C.€Smith,€Esq.Š ( x ŠSiobhan€R.€Keenan,€Esq.Š š @ ŠRubin€&€Rubin,€Chtd.Š ø   Š502€Washington€AvenueŠ € Š  ŠSuite€200Š H ˜  ŠTowson,€MD€€21204€Š `  ŠĢMatthew€M.€Houston,€Esq.Š  š  ŠWechsler€Harwood€LLPŠ hø  Š488€Madison€AvenueŠ 0€  ŠNew€York,€New€York€10022Š ųH  ŠĢDavid€Clarke,€Esq.Š ˆŲ ŠEdward€S.€Scheideman,€Esq.Š P  ŠPiper€RudnickŠ h Š1200€Nineteenth€Street,€N.W.Š ą0 ŠWashington,€DC€€20036„2412Š Øų ŠĢÓH.°°` ø hĄpČ xŠ (#°°‚X†XHÓŌ€X°ÄXXXŁFŌ